Martin Werth: Bank the little wins to boost protection

I recently attended an excellent conference, where British cycling coach Sir David Brailsford gave the keynote address. He discussed his transformation of the UK team from just two gold medals in 18 Olympics up to 2000 to 18 in the subsequent three, with eight in both 2008 and 2012. His message? A relentless search for every possible process improvement to deliver the “aggregation of marginal gains”. The sum of these little wins, each of which is not perfection, can be transformational.

The same logic can apply to protection. The 10 critical success factors I would focus the marginal gains on are:

Remove unnecessary breaks in the sales process: Each enforced break adds cost, as the adviser must re-engage the customer. Some even abandon the process.

Automate pre-application underwriter helpline calls: Our research shows 60 per cent of advisers typically contact two or more insurers before making a recommendation. This is a huge drain on adviser and insurer resources.

If big “T” tele-underwriting works, ask the question at the point of sale: This is used to provide the insurer with additional information. However, where the customer knows the answers, a good reflexive rules engine should elicit the same data at the point of sale.

Increase the percentage of automated “buy now” decisions: Insurers should also continuously review how to automate their top causes of “refer” decisions.

Use general practitioner reports where they add genuine value: GPRs are expensive, so their value is questionable where they result in standard terms or only marginally impact an underwriter’s original assessment. They should be targeted at conditions where the customer does not know sufficient information and an automated rating would be too unreliable.

Close sales not applications: An application is not a sale. Advisers need better early signposting of the probability of a sale, so they can select insurers that can close them and significantly reduce their not taken ups.

Empower online customers: More people want to compare and purchase online but the sales process is clunky at best. Distributors should pilot processes where they can track and support their customers in real time.

Plan to extend the scope of benefits: Customers invariably buy life cover in spite of their wider protection needs. By underwriting other benefits in the background, advisers can determine the best nudge tactics to widen clients’ protection cover.

Migrate from quick quotes to accurate terms: Quick quotes are no longer the only option for comparing insurer terms. Advisers should A/B test quick quotes alongside more accurate or final terms to determine end-to-end sales time, completion rates and customer experience.

An obsession with process can remove small costs and causes of abandoned sales, which can improve sales volume and profitability for advisers and insurers as well as the customer experience.

Recommended

The FCA’s recent adviser firms survey provides valuable insight into how market practice is evolving and the challenges faced. Here are a few key points from a technology perspective and my analysis of lessons that can be learned. Research and analysis The gulf in technology use between large and medium firms and their smaller peers […]

Former pensions minister Steve Webb has called on the Government to take a stronger role in the development of a pensions dashboard, warning the project risks being left “in the slow lane”. As part of the Budget, Chancellor George Osborne pledged to ensure the industry designs, funds and launches a pensions dashboard by 2019. However, […]

HSBC is to cut more than 800 jobs as the lender shifts focus to its India, China and Poland business following a major restructuring plan. The cuts will see 840 IT staff affected in London, Sheffield, Leeds and Birmingham. The move forms part of HSBC’s previously announced three-year plan to cut 8,000 jobs in the […]

Kunal Desai, Head of Indian Equities at Neptune Investment Management India’s stockmarket rallied this week following news that the central bank was cutting interest rates more aggressively than expected. Commenting on the rate cuts and what this means for India’s economic growth, Kunal Desai notes that there were two important details in the announcement that have […]

Newsletter

Latest from Money Marketing

A High Court judge says the FCA can submit evidence in a case that could shape how Sipp misselling claims are handled in the future. In the case, which started today, lorry driver Russell Adams alleges Carey Pensions missold him a self-invested personal pension. Carey Pensions is accused of using unregulated introducers to invest Adams’s […]

Studies have found funds can be too big or too small to outperform, suggesting size does matter The assessment of whether to invest in a certain fund is a tricky business. Bearing in mind roughly 90 per cent of active funds do not beat their benchmarks over periods longer than 10 years, the odds are […]

The following sorry verse embodies procrastination on a whole new level: “Hello there, my name’s Phil; I rap like a small bear writing a will [diligently]; Estate-planning, ninja-whooping IHT; Shame I’m not as bizzie [urban affectation] with the RLP.” These words were penned in response to my father’s short verse sent to me, after the […]